Hedge funds had a good May. A really good May, actually. Equity-focused stock-picking strategies delivered returns of 5.35% during the month, outpacing the MSCI total return index’s 4.55% gain over the same period, according to a Goldman Sachs report released on June 5.
Not every big name crushed it, though. Steve Cohen’s Point72, which manages roughly $50.7B in assets, posted a more modest 2% gain for the month.
Here’s the thing about that MSCI comparison. Passive index investors earned 4.55% in May just by showing up. Hedge funds, with their higher fees and more complex strategies, need to meaningfully beat that number to justify their existence. A gap of 80 basis points in a single month does exactly that, especially when compounded over a full year.
Building on a strong 2025 foundation
Average industry returns in 2025 clocked in at approximately 11.8%. That’s the kind of number that makes allocators feel good about writing large checks. And feel good they did: more than 90% of hedge fund allocators reported that their portfolios met or exceeded expectations last year.
